Reference no: EM132951246

Problem - Equipment purchased at the beginning of the fiscal year for $90,000 is expected to have a useful life of five years, and a residual value of $8,000.

Requirements -

1. Compute the depreciation expense for the each of the five years assuming usage of double- declining balance method. Hint: Don't deduct residual and remember to check last year's depreciation expense to make sure you don't over-depreciate beyond residual value.

2. If the same equipment is sold at the end of the second year (take depreciation for 2 years) for cash of $33,000, journalize the sale of the equipment.